Money and Happiness: The $200 Link

You’ve read about the study by Princeton researchers economist Angus Deaton and psychologist Daniel Kahneman a couple of years back, right? “When asked to assess the happy hours of the previous day—whether people had experienced a lot of enjoyment, laughter, smiling, anger, stress, worry—money mattered only up to about $75,000. After that, money didn't buy more (or less) happiness,” is what we now know.

Personally, I’ve always believed that money can make you happy. Most people who grew up without it will tell you the same thing.

The easiest way to prove that people are happier with more money than less is to go up to a person, pretty much any person will do, and offer the person, say, $200. After the person puts the money away, ask the person if he or she is happier with the $200 than without.

Once the person realizes that this is not a trick, a bid for some illegal act, or part of the pilot of a new reality show for the Spike television channel, that person will declare him or herself “happier with the money” as he or she runs down the street, out of reach and as far from you as humanly possible.

Apart from that little exercise, however—which is not exactly based in the hard-science methodologies that will get me the truly big grants—I’m always skeptical about how even fancy researchers measure happiness.

Who can tell if he or she is happy? And who’ll tell a researcher anything?

Ask a person whether or not he likes chocolate, what his favorite television programs are, or whether he prefers cats to dogs. Chances are you’ll get a pretty straightforward answer. “Sure, I like an Almond Joy every now and then,” he’ll announce without hesitation. He might unashamedly declare “My fear of cats is so phenomenal it should be on display in the Smithsonian.” “Actually, I prefer the Weather Channel’s ‘Local Forecast’ to all other prime-time options,” he could very well proclaim, although in this final instance you might want to reconsider your choice in friends.

But ask these same folks if they are happy and they’ll look at you like you’re trying to sell them something. It’s not a look you would call “welcoming.” Then they’ll become philosophic. They’ll say something like “I could probably be more unhappy than I am, but whether or not I’m actually ‘happy,’ I don’t know if I could say.”

They’ll squint and regard you with deep suspicion, demanding “Why do you want to know?” as if you are trying to get their emotional PIN numbers to discover the available balance in their spiritual checking accounts. “Am I happy?” they’ll repeat, in order to emphasize the ludicrous nature of the expression. “What exactly do you mean by ‘happy’? HUH?”

Soon after they’ll get cranky and find excuses to leave.

Let’s start with what is incontrovertible: a whole lot of people are a whole lot less happy than we are. Daily and genuine disaster is demonstrated every time we watch the news or read the paper, only to see desperate faces peering out of tragic wastelands.

Forget 75K. Most of the world would be happy with 75 dollars.

What money does—and I say this as somebody who at one point had to pay her electric bill and her rent on alternate months because of the whole living-on-grad-student-pay-and-loans deal—is make life easier. But an “easier” situation isn’t always equal to a “happier” situation.

Even getting what you want does not necessarily result in happiness. We would hardly deem a wolf about to sink its teeth into the neck of a lamb “happy” even though he might be satisfied with his results.

$75,000 is A LOT OF MONEY. How many people on the planet make over $75,000/year?

I am 37, I live in a developed country of the G8 and I have a college education and it has only happened to me 3 times, on the way to a 4th year. So let me think... For at least 99% of the world population money buys happiness.

It drives me nuts to see all these articles about how money doesn't buy happiness.